Administrators acting for UK leisure carrier Monarch Airlines will appeal a high court ruling that the grounded airline has no entitlement to its summer 2018 slots.

UK leisure carrier Monarch Airlines entered administration and had its air operator’s certificate (AOC) suspended in the early hours of Oct. 2, marking the UK’s largest ever airline collapse.

The airline’s administrators, KPMG, went to court Nov. 6-7 to seek clarity on whether the carrier still has allocation power over its highly valuable airport slots, especially those at London Gatwick Airport.

The UK high court dismissed Monarch’s claim Nov. 8, dealing a blow to the airline and its creditors, although the door was left open for Monarch to seek a “judicial review”.

“So far as the parties and we are aware, this is the first court application in this jurisdiction on the part of an insolvent airline asserting an entitlement to and seeking to compel the allocation of slots for a future season,” the judge said, delivering his verdict.

He went on to explain that Monarch no longer has any aircraft, operating pilots or an in-force AOC.

“There is no more than a theoretical possibility of Monarch emerging as a going concern or resuming the operation of air services. In these circumstances, we reject the Monarch claim that the defendant, slot coordinator ACL, was under a duty to allocate the summer 2018 slots to Monarch by reason of historical precedence (grandfather rights),” the judge said. “It is one thing to permit a secondary market in slots. It is another to extend it to companies in insolvency.”

ACL has been told to move ahead with allocating the summer 2018 slots because reserving or postponing its decision would “sterilize or distort” the market.

“The consequence of our decision is that the summer 2018 slots are to be placed in the slot pool,” the judge said.

KPMG partner and Monarch airlines administrator Blair Nimmo said he was disappointed by the ruling and “will be seeking leave to appeal as a matter of urgency.”

The next milestone in the administration process is likely to be the first report to creditors, which is scheduled to be published toward the end of November. This will detail how Monarch found itself in a financial crisis and how the administrators propose to proceed.

Victoria Moores victoria.moores@penton.com